Shares in natural gas and helium producer Renergen Ltd (ASX: RLT) have jumped out of the starting blocks today and are now changing hands 21% higher at $3.40 apiece.
To start the session, the Renergen share price was trading up 25% at $3.45 before correcting back down.
Renergen shares are on the move following a company announcement updating its flagship Virginia gas project in South Africa.
Here are the details.
Renergen increases reserves by over 600%
Renergen advised that after a recent successful drilling campaign, it commissioned a reserves and resources accreditation agency to "estimate the reserves and resources of methane and helium within the company's Virginia production area".
The estimate enabled Renergen to substantially upgrade its methane and helium reserves at the site.
The release notes that 1P helium reserves have increased by a mammoth 620% to 7.2Bcf and 1P methane reserves have increased by 427% to 215Bcf.
Judging from the the results, the estimate upgrade "highlights the exciting potential of Virginia to be a globally significant supplier of helium".
Immediately following the announcement, Renergen also released an investor presentation detailing the upgrade and some of the particulars of the Virginia site.
Investors have sent the Renergen share price flying on the back of the news this morning, solidifying their position in the natural gas and helium producer.
With natural gas prices approaching 10-year highs, and already surpassing 5-year highs, it stands to reason the company may benefit from the newfound resource capacity.
Without a doubt, Renergen management is ecstatic with the upgrade, noting it is a "major milestone for the company and confirms the Virginia project as a world class helium project".
What are management saying?
Speaking on the announcement, Renergen's CEO Stefano Marani said:
We have and continue to work towards ensuring Virginia is well-placed to supply helium into a growing and constrained market. Increasing our 1P helium reserves by over 600% since March 2019 is a great step forward in achieving this goal and importantly, highlights the enormous potential of Virginia to become a significant helium supplier to not only South Africa but globally as well. Additionally, an estimated 400 petajoules of methane at 2P also positions the Company exceedingly well to become an integral part of South Africa's energy mix.
Marani continued:
2021 has been an excellent year for Renergen, with several milestones achieved and we look forward to firmly ending the calendar year. 2022 is shaping up to be even more exciting as we commence production from the Phase 1 plant and begin generating revenue.
Renergen share price snapshot
It's been a year in the green for the Renergen share price, having climbed 168% in the past 12 months after rallying 215% since January 1.
These results have far outpaced the S&P/ASX 200 Index (ASX: XJO)'s climb of around 24% over the same time.
